New Delhi: Indicating worsening of the price situation, inflation - wholesale as well as retail - went up in September because of costlier food items, especially onion and vegetables, dimming the prospects of rate cut by RBI later this month to boost the sagging economy.
While the Wholesale Price Index (WPI) based inflation climbed to 7-month high of 6.46 percent, the one based on Consumer Price Index (CPI) inched closer to double digit at 9.84 percent, according to government data released on Monday.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said inflation is "uncomfortably" high but expressed hope that it would come down in the coming months within the comfort zone of 5-6 percent.
Deteriorating price situation will make the Reserve Bank task of reducing interest rate - being demanded by the industry - difficult at monetary policy review on October 29.
Facing slowdown, industry wants RBI not to contemplate any rate hike to rein in inflation as economic growth has already slipped to 4.4 percent in the first quarter of this fiscal, and the industrial growth has been nearly flat at 0.6 percent in August (latest data).
As per the WPI data, inflation was 6.1 percent in August and 5.85 percent (revised upward from 5.79 percent) in July. In September last year, it was 8.07 percent.
The sharpest increase was noticed in onion prices which jumped by 322.94 percent over the same month last year.
Vegetables in general were costlier by 89.37 percent year-on-year making life difficult for the common man.
Fruits too were costlier by 13.54 percent year-on-year during September.
Overall, the food inflation increased at higher rate in September at 18.40 percent as compared to the previous month. Inflation in this segment was 18.18 percent in August.
The price situation was similar as per the CPI data with vegetable prices rising 34.93 percent in September.
Commenting on WPI inflation, Food Minister K V Thomas said the cost of agriculture produce has increased due to NREGA wages, besides higher Minimum Support Price.
The WPI inflation in the manufactured items segment was 2.03 in September, year-on-year.
In the fuel and power segment, inflation in LPG was 9 percent, petrol - 9.64 percent and diesel - 20.13 percent in September, year-on-year.
CPI based retail inflation was at 9.52 percent in August.
Retail inflation for rural and urban areas in September stood at 9.71 percent and 9.93 percent respectively. The same was 8.93 percent and 10.32 percent (revised figures) in August.
Consumer inflation in the food and beverages segment rose by 11.44 percent in last month, as against 11.06 percent in August.
Industry chamber CII said the rise in inflation should not come in the way of monetary easing by RBI as the arrival of kharif crop in October will provide some relief in food prices.
Another chamber Assocham said the RBI "must not" resort to interest rate tightening, as it would further push prices.
Commenting on inflation data, industry body Ficci said the food inflation has remained at high levels for an extended period and needs to be tackled by taking adequate measures on the supply and distribution side.
First Published: Monday, October 14, 2013, 21:16